Federal Reserve Chairman Ben Bernanke gave a much-awaited, extremely long, and paradoxical speech at the Kansas City Fed's Jackson Hole banking conference yesterday, in which he claimed that large-scale central bank money-printing is a justified success historically, theoretically, and in the recent financial crash—but has not worked on the economy. He also appeared to be promising more money-printing from the Fed in the near future. But because Bernanke was promising more hyperinflation while obviously acknowledging that it had failed, the response to his oracular speech by financial "experts" and markets was quite confused. It ranged from CNBC's "Bernanke: No More Stimulus for Now," to Reuters' "Bernanke Says Fed Ready To Act," with every gradation in between.

Not wanting to blame the economic failure on himself, or on the Fed's (historically-theoretically-recently justified and completely correct) money-printing policy, Bernanke—who may be approaching his dread "Alan Greenspan late-2008 moment"—in effect blamed Obama, although of course not by name.

Bernanke first reviewed the money-printing policy, recounting how rapidly the Fed moved the discount rate from 5.75% (August 2007) to 0-0.25% (December 2008), and reviewing all the many trillions of liquidity facilities for, and asset purchases from, the banks. In other words: It has been done. He then reviewed at length the theoretical literature on money-printing, concentrating particularly on Milton Friedman and James Tobin, getting deep into "lessons of the Great Depression" and the niceties of "portfolio substitution effects", etc. In other words: It should have worked.

Then the Fed chairman reviewed the actual course of his hyperinflation policy, 2007-12, insisting that the great good of higher asset prices and lower long-term yields had been achieved across the board, including in the stock market. In other words: it was successful.

But—it didn't work; the final section of Bernanke's speech. The state of [Obama's] economy is "far from satisfactory," and characterized by extreme labor stagnation. "We have seen no net improvement in the unemployment rate since January. Unless the economy begins to grow more quickly than it has recently [and actually, he notes, the very low growth is now slowing down further], the unemployment rate is likely to remain far above levels consistent with maximum employment for some time. This is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for years." Also, "The unemployment rate remains [far] above what most FOMC [Federal Open Market Committee] participants see as its longer-run normal value, and other indicators—such as the labor force participation rate and the number of people working part time for economic reasons—confirm that labor force utilization remains at very low levels."

It's enough to get a President thrown out. Bernanke's "reasons" for the failure also condemn the Obama Administration. First: the housing depression. SIGTARP Neil Barofsky has decisively pinned that tail on the donkey that wags it. Second: lack of government spending or employment against the collapse at Federal, state, or local level. Obama's anti-FDR policy. Third, of course, "Europe."

On printing money: "The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant." So clearly he will go for hyperinflation at the FOMC Sept. 12 meeting—maybe. The stuff of tragedy.

Lyndon LaRouche responded, "The thing is, that you've got two groups. You've got the group which are for so-called quantitative easing, and then you've got Obama, who's got himself in a difficulty there, because if he does that, and he goes into immediate hyperinflation, then that's the end of Obama. So Obama may be resisting on this hyperinflation—but it may not be the case, either. But those are the two options you've got to consider primarily, and see if there's something there, or some third or fourth variant that's in play."